Defaulted Student Loan Rates Higher in 2009
As we approach that time of year again where many recent graduates (or college drop outs) prepare to begin repayment of their many student loans they’ve racked up during their college careers. And with the economy still in a bit of a slump, many grads are finding it tough to find jobs that will cover the cost of their monthly student loan payments. So it’s not too surprising to find out that the rate of defaulted student loans is a bit higher in 2009 than they were just a few years ago, but there is reason to be optimistic about these numbers.
In case you don’t know, student loan repayment generally begins 6 months after you graduate from college, or 6 months from when you drop below as least half-time status (6 college credits). Recent graduates are finding it beginning to stress out about these upcoming student loan repayments and rightfully so – some students have racked up $40k, $50k, or more student debt and repayment is right around the corner!…We’re talking $500/month or more in student loan payments!
According to the Washington Post, the percentage of students who have incurred defaulted student loans is up to about 6.7%, which is about 1.5% higher than it was in 2006. While it’s not a good thing that these default rates are higher, it is a good sign that they’ve only increased by a very small percentage. As a comparison, in 1990 the percentage of students who defaulted on student loans was 22.4%, so 6.7% doesn’t sound all that bad.
To avoid defaulting on student loans, grads can seek out help from their college financial aid office, request that the repayment date be extended – which is called student loan deferment, consolidate your student loans to lower the payment, or you can try a student loan forgiveness program. There are plenty of options out there that can help reduce or eliminate your student debt to manageable levels, but the key is to plan ahead and be prepared.
Photo: Flickr – TheTruthAbout…
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